Court of Appeals Vacates Lower Court's Rejection of EEOC Consent Decree in Disability Bias Case

District Court Must Re-Evaluate EEOC Consent Decree Following Appeals Court Ruling

MINNEAPOLIS – In a ruling issued today, the U.S. Court of Appeals for the Eighth Circuit reversed a lower court decision that rejected a consent decree resolving an U.S. Equal Employment Opportunity Commission (EEOC) disability discrimination lawsuit against Pine City, Minn.-based Product Fabricators, Inc. (EEOC v. Product Fabricators, Inc., Case No. 09-cv-2303 (D. Minn.) (PAM/LIB), USCA 8th Circuit Case No. 11-01241.)

Today's decision vacates a November 30, 2010 decision by U.S. District Court Judge Paul A. Magnuson of the District of Minnesota, who rejected the EEOC's consent decree because it contained a provision requiring the court to continue its jurisdiction over the consent decree for the term of the decree – two years – for purposes of ensuring that the parties complied with its terms.

The EEOC had sued Product Fabricators in 2009 for violating federal disability discrimination law by its policies requiring employees to report their use of legal prescription drugs. The EEOC charged that the company unlawfully fired an employee for taking prescribed drugs for back pain. The consent decree settling the suit provided monetary relief of $40,000 to him and enjoined the company from continuing its policy requiring disclosure of prescription drug use.

In reversing the lower court's decision, the Eighth Circuit embraced the principle that "[c]ontinuing jurisdiction is the norm (and often the motivation) for consent decrees." The Eighth Circuit further recognized that "[a] consent decree offers more security to the parties than a settlement agreement where the only penalty for failure to abide the agreement is another suit."

"Today's ruling by the Eight Circuit reinforces a critical component of negotiated settlements in EEOC lawsuits which is the agency's ability to guarantee compliance with important settlement terms through the immediate court enforcement," said EEOC Regional Attorney John Hendrickson. "Continuing jurisdiction provisions in our consent decrees – as the Eighth Circuit reinforced today – serve as an important form of insurance for the public. Once the EEOC has reached a settlement with employer accused of discrimination, continuing jurisdiction provisions enable the EEOC to ensure that defendants will comply with civil rights laws for years to come."

Nicholas Pladson, an EEOC trial attorney in Minneapolis who negotiated the consent decree which was before the Court of Appeals, said, "Today's decision affirms the importance of settlements in employment discrimination cases in which all the terms appear in the public record, and the important role the judiciary serves by ensuring that defendants comply with those settlement terms."

Pladson added, "Because settlements are final resolutions that end cases, we don't see a lot of court decisions which are handed down, as in this case, after the negotiations are completed. This case is obviously an exception – one which, in our judgment, correctly addresses an important aspect of how we conduct and resolve litigation."

The EEOC's Chicago District Office is responsible for processing discrimination charges, administrative enforcement and the conduct of agency litigation in Minnesota, Illinois, Wisconsin, Iowa, North Dakota and South Dakota, and operates Area Offices in Milwaukee and Minneapolis.

The EEOC is responsible for enforcing federal laws against employment discrimination. Further information is available at www.eeoc.gov.